Insight

Rising middle class in China imparts potential for the global tourism

03/28/2016|2:08:30 PM|ChinaReadyNews

ANZ projections indicate that China’s middle class by broad definition will reach about 93% of the urban population by 2030 and the rise of China’s middle class will help lift consumption share in GDP to around 50% by 2030 from 36% in 2014.

China’s economic growth has been fascinating for the past few decades despite slacking growth for now. China's middle class has grown along with the total economy size increase. For the next few decades hundreds of millions of Chinese families are likely to join the ongoing increase in household wealth, propelling huge increases in consumption across a wide variety of sectors, according to prejections from ANZ greater China economists Li-Gang Liu and Louis Lam in a research note.

“Our projections show that the total middle class population will reach 854m in China’s urban areas by 2030. In particular, the household income level of the affluent middle class population will likely reach Taiwan’s current median household income level. The rise of China’s middle class will help lift consumption share in GDP to around 50% by 2030 from 36% in 2014″.

“China has already become the largest market for some global luxury brands. For example, premium carmaker BMW AG’s China sales surged 16.6% to 456,732 units in 2014, making China its largest market. Daimler, the German carmaker for Mercedes, also recorded sales of 281,588 units in China during 2014, making China its second largest market behind the US. Aside from luxury cars, sales of other luxury goods, such as cosmetics, watches, high-end fashion, are also rising rapidly. Reportedly, China has already become the world’s largest luxury consumer market”.

They also forecast that by 2030 per capita disposable income in urban areas will be in excess of $US30,000 in purchasing power parity terms, up from less than $US10,000 at present.

With China’s urban population expected to swell to 854 million over the next 15 years, should their projections turn out to be correct, the opportunities it will create domestically and abroad will be like nothing the world has seen before.